Much of silicon valley is/was devoted to the transistor. Now that innovation has been assimilated into products and there's not all that much more you can do to the transistor to make it more useful to drive new products, it isn't surprising to see silicon valley slow down. Why would anyone expect innovation to crank on at a steady pace? Everything goes though cycles, innovation is no different?
In addition, scientific breakthroughs are what drives real innovation. Seeing this, Congress has seen fit to cut research spending as have companies. It is the revenge of the bean counters who were never good at science. Scientific breakthroughs are not consistent even with consistent research funding. It took 10s of years to for quantum theory to influence modern electronics. Gravitation theory took 10s of years to influence GPS systems. The cut-off in research funding will eventually result in us just rearranging the technological deck chairs, there won't be new science to draw upon.
There is also the effect of low hanging techno-fruit. It's been plucked over fairly well. Transportation is a good example. Short of developing transporter beams, the jump from the 19th century to the 20th was immense. That's unlikely to continue. Other industries are similar. We got very, very good at what we do with what we have. Even the Wall Street Journal had an article this weekend on how the world is awash in just about everything...oil, minerals, workforce, etc. We're very efficient at producing stuff, so efficient we don't know what to do with it all.